Trump claims consumers are being ‘gouged’ by gas companies and orders DOJ price probe, as Bessent warns U.S. must avoid ‘foreign chokepoints’
With tensions in the Middle East slowly unwinding, President Trump wants to see the step-down in oil prices reflected at the pumps for American consumers. In fact, he’s ordered a Department of Justice probe into the issue to find out why gas isn’t already cheaper.In a Truth Social post early this morning, Donald Trump wrote that oil prices are “dropping like a rock,” but “the big oil companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for oil.”Consumers are being “gouged,” the president added, and as such: “I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!” Trump did not share any further details of the probe or which companies will be investigated. Crude oil prices have been falling sharply for the past month, down from $104 a barrel to just under $76 at the time of writing, a drop of 27%. Meanwhile, gas price data from the AAA shows the national average for regular gas is now $3.93 a gallon, dropping below $4 for the first time since March 30. Gas prices have been falling: A month ago, a gallon of regular gas cost $4.52, while diesel cost $5.62 (it has since dropped to just below $5 a gallon). Gas prices haven’t dropped at the same pace as oil; the month-on-month drop for regular gas is approximately 13%. There are mitigating circumstances: Firstly, oil price shocks take some time to filter through to consumer prices. As Hakan Yilmazkuday wrote in the Journal of International Money and Finance in 2021, U.S. data suggest that oil price pass-through into gasoline retail prices is about 13% after a week, 37% after three months, and 50% in the long run. Likewise, questions hanging over oil supply are far from over. President Trump wrote on Truth Social overnight that he has Iran “on the ‘ropes,’ ready to go down for the fall, willing to gi